News & Publications

Registration Obiligation for Intermediaries

Submitted By Firm: Boekel De Nerée

Contact(s): Eugenie Nunes, Sascha C. Kuit

Author(s):

Annemarie Roukema

Date Published: 8/14/2012

Article Type: Legal Update

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The Registration Obligation for Intermediaries Providing Personnel Act came into effect on 1 July 2012. This is an amendment to the Placement of Personnel by Intermediaries Act (WAADI), which governs the provision of personnel to third parties. The amendment of the WAADI has consequences for both employment supplier and hirer.

Provision of personnel

In Section 1(c), the WAADI describes this as follows: "the provision of personnel to another party in return for payment, for the performance of work under that party's supervision or management, other than under an employment contract entered into with that party." Three elements of this definition are relevant:

1. a company provides personnel to another company;
2. in return for payment;
3. the personnel provided, work under the supervision and management of the other company.

Under the WAADI, the provision of personnel for the performance of work in a company operated by the same proprietor as the one providing the personnel does not qualify. In other words, the WAADI does not apply to intra-group personnel sourcing.

Nature and background of the amendment

As a result of the amendment of the WAADI, since 1 July 2012 all employers who provide personnel to others in return for payment, whether on a systematic or occasional basis, are subject to a registration obligation. This amendment has consequences for both employment suppliers and hirers. As of 1 July 2012, hirers are obliged to do business with registered employment agencies. At the same time, employment agencies may only provide workers in the Netherlands if they are registered as such in the Trade Register. This obligation applies equally to domestic and foreign employment agencies as well as mobile employment agencies.

The amendment is intended to increase transparency in companies providing personnel in order to better enable the authorities to track down fraud. The registration obligation is meant to ensure better protection of employees and promote fair competition in the sector. 

Are you an employment supplier?

Every company or legal person that provides personnel must register as such in the Trade Register. An employment supplier must note in its Chamber of Commerce entry whether it provides personnel on a commercial basis. Businesses that provide personnel on a commercial basis, such as employment agencies, can register this with the Chamber of Commerce using a change form. Suppliers that do not provide personnel on a commercial basis, these being companies for which providing personnel is not the core business, can notify the Chamber of Commerce in their region by phone or e-mail. Failure to fulfil this obligation has serious consequences. Employment suppliers run the risk of being audited by the Inspection Service of the Ministry of Social Affairs and Employment, with violations subject to penalties of €12,000,- per employee up to a maximum of €76,000,- per violation. Upon recidivism within five years, the penalties are doubled, and in the event of a second instance of recidivism the penalties are tripled.

Are you a hirer?

The law also has consequences for those who hire workers. Hirers may no longer use the services of employment suppliers not registered as such. To ensure that an employment supplier is registered, the hirer can consult the website of the Chamber of Commerce (www.kvk.nl/waadi). A company that hires personnel from a non-registered services supplier also faces fines of €12,000,- per employee up to a maximum of €76,000,- per violation. And likewise, penalties are doubled for the second violation within five years and tripled for the third violation. Hirers can avoid the penalty by demonstrating that the employment supplier did actually have a registration at the moment that the hirer consulted the Trade Register. This can be done in a number of ways, such as producing a trade registry extract.

Conclusion

The amendment of the WAADI makes the duty of disclosure and obligation to investigate for employment suppliers and hirers respectively, considerably more strict. If you are active in this sector, you need to be aware of these changes. Employment suppliers must ensure that their registration in the trade register is accurate. And as from 1 July 2012, hirers must actively check whether their employment suppliers are openly registered as such in the trade register. Violation of these relatively minor formal requirements can be very costly to both parties. 

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